Jun 22, 2024 01:42 PM

Post-Pandemic Rebound in Film Market Levels Off as Supply, Demand Concerns Re-Emerge(AI Translation)

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文|财新周刊 关聪

By Guan Cong, Caixin Weekly


As the summer box office season kicks off, film companies were visibly anxious at the Shanghai International Film Festival, which is often regarded as an industry barometer: Are audiences still willing to go to theaters?


On June 17, 2024, Alibaba Pictures (01060.HK), in collaboration with several domestic film production companies, unveiled a slate of seven major Chinese-language films, deemed "blockbusters." Among them, only Wu Ershan's new production "The Weirdo" and Xu Zheng's self-directed and starring "Life Against the Current" have confirmed to be released during this year's "summer season." Of the remaining five films, Andy Lau’s produced "The Burning City" is still in production, while Wu Jing’s martial arts film "The Bodyguard," Guan Hu’s "Dongji Island," the sci-fi film "When the Stars Shine," and Feng Xiaogang's "Catching Spies" have yet to begin filming.


At this event aimed at "restoring confidence and boosting morale," Li Jie, president of Alibaba Pictures, candidly stated: "The Chinese film market has been booming over the past year, but beneath this prosperity lies considerable concern. Currently, the average number of viewers per screening and the total number of viewers are under significant pressure. Our biggest challenge is how films can capture more effective user attention in the competition against other types of video content."

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Post-Pandemic Rebound in Film Market Levels Off as Supply, Demand Concerns Re-Emerge(AI Translation)
Explore the story in 30 seconds
  • The Shanghai International Film Festival highlighted industry anxieties about declining movie theater attendance despite new film releases.
  • Alibaba Pictures announced seven major Chinese-language films; only two are set for summer 2024 release.
  • Chinese box office faces decreased attendance and revenue amid economic pressures and increased competition from other video content.
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Explore the story in 3 minutes

As the summer box office season starts, film companies were visibly anxious at the Shanghai International Film Festival about audience return to theaters [para. 1]. On June 17, 2024, Alibaba Pictures unveiled seven major Chinese-language films, but only two will release during the summer season, while others remain in production or pre-production [para. 2]. During a confidence-boosting event, Alibaba Pictures president Li Jie stated that the Chinese film market, despite booming, faces pressures from declining viewer numbers and competition from other types of video content [para. 3].

The "Dragon Boat Festival Box Office" from June 8-10, 2024, saw a significant downturn, with revenue dropping by 58% year-on-year despite increased screening counts [para. 4]. Maoyan Pro statistics indicated that, as of June 21, 2024, total box office revenue was down by 800 million yuan compared to the previous year, with a significant drop in viewer numbers and average viewers per screening [para. 5].

Industry executives expressed concerns over declining enthusiasm for movie-watching, highlighting economic pressures and weaker demand for new films [para. 6][para. 7]. The concentrated supply of blockbuster films accumulated during the pandemic led to a record summer box office in 2023, but the current market faced gaps in new releases [para. 8][para. 9].

The digital transformation of the entertainment scene has led to increased availability of films on video platforms shortly after their theatrical release, further challenging traditional cinema attendance. Internet companies have engaged deeply with the film industry, accelerating digitization [para. 10][para. 11]. Despite an increase in the number of cinema screens nationwide from 34,000 in 2015 to 77,000 in 2023, cinema occupancy remains low [para. 11].

Hollywood's strike in 2023 has delayed many blockbuster releases, creating opportunities for Chinese films to go global [para. 12]. In April, British firm Gower Street Analytics predicted a global box office of $32.3 billion in 2024, with a decrease in the U.S. market but slight growth in China [para. 12]. AI application in the film industry is rising, especially with the release of OpenAI's video generation model Sora, which could mark significant technological advancements [para. 13].

Urgent supply-demand imbalances have been noted, with a gap in the release schedule of major projects [para. 14]. The volume and quality of upcoming film releases are crucial for market stability, and industry insiders emphasized the unpredictability of audience tastes and the challenge of creating films that appeal to them [para. 15][para. 16]. Rapid changes in preferences complicate marketing strategies and require continuous adjustments [para. 17].

Recent box office results show volatile performance, with major periods seeing unpredictable revenues [para. 18][para. 19]. Investment in film projects has become more cautious, leading to a concentration of resources on high-budget films and sidelining smaller projects [para. 20]. Despite financial rationality, the formula for a successful blockbuster remains elusive [para. 21].

Domestically successful films are increasingly looking for international markets. For instance, "Creation of the Gods I: Kingdom of Storms" explored overseas distribution, reflecting broader efforts of Chinese films to appeal internationally [para. 22][para. 23]. Chinese films are still struggling to achieve significant international box office success, largely due to a lack of internationally influential IPs and inadequate global distribution infrastructure [para. 24][para. 25].

Hollywood's creative slump and ongoing discussions about Chinese films' global reach juxtapose with increased AI integration in film production. AI holds promise for enhancing productivity but poses questions about maintaining the essence of human creativity in filmmaking [para. 26][para. 27][para. 28]. Leading companies in China are embracing AI technologies in animation and feature film production [para. 29][para. 30], and industry leaders are preparing for a future where AI plays a significant role in the film and television landscape [para. 31].

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Who’s Who
Alibaba Pictures
Alibaba Pictures (01060.HK) unveiled seven major Chinese-language films at the Shanghai International Film Festival on June 17, 2024. Only "The Great Magician" by Wu Ershan and the self-directed "The Inverse Life" by Xu Zheng are confirmed for this summer. Alibaba Pictures' President Li Jie highlighted concerns over declining cinema attendance and competition from other video content formats.
Enlight Media
Enlight Media (300251.SZ) released "Ne Zha" in 2019, the box office champion that year. The sequel, "Ne Zha: The Demon Sea," was pushed for a 2023 year-end release but remains undated for 2024 summer. The company grapples with evolving audience tastes and delayed projects despite thorough market anticipation.
Huayi Brothers
According to the article, a representative from Huayi Brothers noted that audience preferences are changing rapidly, making it challenging to determine what type of films to produce. The company emphasized the importance of dynamic and timely marketing strategies, especially with the rise of short-form video content on platforms like TikTok.
Bona Film Group
Bona Film Group has been actively embracing AI in film production. They have formed a special AI studio, collaborated on the AIGC sci-fi series "Sanxingdui: Future Revelations," and plan to use a "digital Jackie Chan" in the upcoming film "The Legend," with various AIGC applications in place.
Shanghai Film Corporation
Shanghai Film Corporation (601595.SH) is transforming its Haopu Film Base, acquired for shooting the series "Blossoms," into an AI creation center. The company has secured a 30% computing power subsidy from the Songjiang District government. Additionally, it plans to use AI for simulating Antarctic environments in the upcoming movie "Snow Dragon," directed by Zhang Mo, Zhang Yimou's daughter.
Digital Domain
Digital Domain (00547.HK) is a visual effects company whose CEO, Charles Xue, believes that AI will deeply influence the industry over the next decade. He emphasizes the importance of IP and creative capability, highlighting that existing research on complex aspects like human faces will be crucial as AI continues to advance.
Kuaishou Technology
Kuaishou Technology, referenced in the article, is a Chinese internet company that has announced a text-to-video model known as "Kling." This model is part of their efforts to engage with AI-generated content, joining other major Chinese tech companies like ByteDance and Tencent in this initiative.
Meitu (美图) is one of the Chinese internet companies that have announced text-to-video models. It is mentioned in the context of following the trend of AI video generation, alongside other companies like ByteDance, SenseTime, Tencent, and Kuaishou.
AI generated, for reference only
What Happened When
February 2024:
Creation of the Gods I: Kingdom of Storms had a special two-day limited screening in France.
March 2024:
Netflix released the first season of 'The 3 Body Problem,' which topped viewership charts in 93 countries within four days.
April 2024:
British film research firm Gower Street Analytics predicted the global box office to reach $32.3 billion in 2024, with respective revenues of $8.2 billion and $7.9 billion for the U.S. and China.
Early June 2024:
Jia Zhangke was elected President of the 7th Chinese Film Directors' Association.
June 8-10, 2024:
Dragon Boat Festival Box Office period with a significant downturn, totaling only 380 million yuan.
By June 15, 2024:
The Dog Pack, a Chinese film that won Best Film in Cannes' Un Certain Regard section, premiered.
June 17, 2024:
Alibaba Pictures unveiled a slate of seven major Chinese-language films at the Shanghai International Film Festival.
After June 17, 2024:
Wu Ershan's 'The Weirdo' and Xu Zheng's 'Life Against the Current' were confirmed for release during the 2024 summer season.
As of June 21, 2024:
Total box office revenue in China stood at 23 billion yuan, nearly 800 million less than the previous year.
AI generated, for reference only
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